High income US equity portfolio mixing dividend focus with option enhanced yield
Report created on May 10, 2026Risk profile
4/7
Diversification profile
2/5
Positions
-
SC Schwab U.S. Dividend Equity ETF
SCHD - US8085247976 60.00% -
QQ NEOS Nasdaq 100 High Income ETF
QQQI - US78433H6751 40.00%
This portfolio is extremely simple, holding just two US-focused equity ETFs: a broad US dividend fund at 60% and a Nasdaq 100 high-income fund at 40%. That means all exposure is in stocks, with no bonds or cash included in the analysis. A two-holding setup is easy to follow and monitor, and both funds hold dozens of underlying companies, so diversification mainly happens inside each ETF rather than across many separate funds. Structurally, this is a concentrated approach to implementation but not a “single stock bet.” The blend of a more traditional dividend ETF with an options-based high-income product shapes both the return pattern and the very strong overall yield.
Growth
Over the period from early 2024 to May 2026, $1,000 in this portfolio grew to about $1,416, which translates to a compound annual growth rate (CAGR) of 16.62%. CAGR is like your average speed over a long road trip, smoothing out all the ups and downs. Over the same window, the US and global equity markets did a bit better, with CAGRs around 21%, so this portfolio lagged by roughly 4 percentage points a year. The max drawdown was about -16%, slightly shallower than the US market’s -18.8%. Only 15 days made up 90% of gains, underlining how a handful of strong days can drive most of the long-term result.
Projection
The Monte Carlo projection uses past return and volatility patterns to simulate many possible 15‑year futures, like running thousands of “what if” market paths. In these 1,000 simulations, the median outcome turns $1,000 into about $2,707, implying an annualized return of roughly 7.9%. The middle half of scenarios (between the 25th and 75th percentile) end between about $1,758 and $4,150, showing a wide but reasonable range of outcomes for an all‑equity portfolio. The fact that about 73% of simulations finish positive is encouraging, but it’s important to remember that these results rely on historical patterns that can change, and they don’t protect against extreme, unexpected events.
Asset classes
- Stocks 100%
All of this portfolio sits in one asset class: stocks. That creates a clear growth-oriented profile, with returns closely tied to corporate earnings and equity market conditions. In many multi‑asset benchmarks, bonds and sometimes real assets appear alongside stocks, which can smooth the ride when markets get rough. Here, the absence of those stabilizers helps keep potential long‑term returns higher but also means that short‑term swings come entirely from equity market ups and downs. From a structural point of view, this single‑asset‑class exposure is simple, transparent, and easy to understand, but it relies fully on stock-market behavior rather than drawing risk from different asset types.
Sectors
- Technology 32%
- Consumer Staples 15%
- Health Care 13%
- Telecommunications 10%
- Energy 9%
- Consumer Discretionary 9%
- Financials 6%
- Industrials 6%
- Utilities 1%
Sector-wise, the portfolio leans heavily into technology at 32%, with meaningful allocations to consumer staples, health care, telecom, energy, and consumer discretionary. Compared with typical broad market indices, this tech allocation is elevated but not extreme, especially given the Nasdaq‑linked income ETF. The presence of staples and health care adds some defensive flavor, as these sectors often hold up better when economic growth slows. Tech-heavy portfolios can experience larger swings when interest rates change or when growth expectations are reset, while staples and health care may help dampen some of that movement. Overall, the sector mix shows a blend of growth-oriented and more stable companies, which helps balance the focus on income.
Regions
- North America 99%
- Europe Developed 1%
Geographically, this is almost a pure US equity portfolio, with about 99% in North America and only 1% in developed Europe. Many global benchmarks spread more across regions, but US exposure often dominates them too, given the size of the American market. A nearly all‑US allocation means results will track US economic, political, and currency developments quite closely. It also means that other regions’ recoveries or growth spurts don’t contribute much here. The upside is familiarity and alignment with the client’s home market and currency; the trade‑off is limited diversification across different economies, regulatory environments, and monetary policies.
Market capitalization
- Large-cap 58%
- Mega-cap 22%
- Mid-cap 18%
- Small-cap 2%
- Micro-cap 1%
By market capitalization, the portfolio tilts clearly toward larger companies: about 80% sits in large‑cap and mega‑cap stocks, with the rest in mid, small, and micro caps. Large and mega caps are typically established firms with more stable earnings and deeper trading liquidity, which can moderate volatility relative to portfolios packed with small caps. Smaller companies, though a small slice here, can add a bit of extra growth potential and different business drivers. Compared to a pure Nasdaq‑style growth portfolio, this size mix looks more balanced, while still being anchored in big, globally recognized names. That anchor tends to produce more predictable behavior relative to broad US indices.
True holdings
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TX Texas Instruments Incorporated 3.40%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
QC Qualcomm Incorporated 3.35%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
NV NVIDIA Corporation 3.23%
Part of fund(s):- NEOS Nasdaq 100 High Income ETF
-
UN UnitedHealth Group Incorporated 3.05%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
AA Apple Inc 2.74%
Part of fund(s):- NEOS Nasdaq 100 High Income ETF
-
KO The Coca-Cola Company 2.42%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
CV Chevron Corp 2.37%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
PE PepsiCo Inc 2.30%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
MR Merck & Company Inc 2.25%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
PG Procter & Gamble Company 2.22%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
- Top 10 total 27.34%
Looking through the ETFs’ top holdings, several big names show up, including Texas Instruments, Qualcomm, NVIDIA, UnitedHealth, Apple, Coca‑Cola, Chevron, PepsiCo, Merck, and Procter & Gamble. Each of these sits around 2–3% at the portfolio level based on the top‑10 data. Because overlap is calculated only from ETF top‑10 lists, total concentration is likely a bit understated; some companies may appear lower down in both funds. Still, no single company dominates the portfolio, which is a positive sign for diversification. The mix of semiconductor, health care, consumer staples, and energy leaders suggests that the income stream is backed by a broad set of business models rather than one narrow industry.
Factors
Factor exposures are estimated using statistical models based on historical data and measure systematic (market-relative) tilts, not absolute portfolio characteristics. Results may vary depending on the analysis period, data availability, and currency of the underlying assets.
Factor exposure shows very strong tilts toward value, yield, and low volatility, with all three in the “very high” range versus a market‑average score of 50%. Factors are like investing “ingredients” that describe why groups of stocks behave the way they do. A high value tilt means the portfolio leans toward companies priced cheaply relative to fundamentals, which historically has sometimes helped in periods when hot growth names cool off. Very high yield reflects an emphasis on stocks (and option strategies) that pay out more cash, boosting income but also concentrating return sources. High low‑volatility exposure points to a focus on steadier stocks that, over time, tend to swing less than the broader market, though they can still fall significantly in sharp downturns.
Risk contribution
-
Schwab U.S. Dividend Equity ETF
Weight: 60.00% 55.6% -
NEOS Nasdaq 100 High Income ETF
Weight: 40.00% 44.4%
Risk contribution looks at how much each ETF drives the portfolio’s overall ups and downs, which can differ from simple weight. The Schwab dividend ETF is 60% of the portfolio and contributes about 56% of the risk, so its risk/weight ratio below 1 suggests it’s slightly more stable than its size alone would imply. The Nasdaq 100 high‑income ETF is 40% of assets but about 44% of the risk, so its risk/weight ratio above 1 signals it punches a bit above its weight in volatility terms. This pattern fits the idea that an options‑based, tech‑tilted income strategy can move more sharply, even when its allocation is smaller than the core dividend holding.
Risk vs. return
This chart shows the Efficient Frontier, calculated using your current assets with different allocation combinations. It highlights the best balance between risk and return based on historical data. "Efficient" portfolios maximize returns for a given risk or minimize risk for a given return. Portfolios below the curve are less efficient. This is informational and not a recommendation to buy or sell any assets.
Click on the colored dots to explore allocations.
The efficient frontier analysis shows the current mix sitting on or very near the frontier, which is the curve of the best possible risk/return combinations using these two ETFs. The portfolio’s Sharpe ratio — a measure of return per unit of risk — is 0.95, compared with 1.21 for the maximum‑Sharpe combination and 1.12 for the minimum‑variance mix. All three points are fairly close in both risk and return, which suggests that, given only these holdings, the existing allocation is already using them quite efficiently. In other words, the trade‑off between volatility and expected return looks well‑balanced for this specific set of funds, without any obvious inefficiency in weighting.
Dividends
- NEOS Nasdaq 100 High Income ETF 13.40%
- Schwab U.S. Dividend Equity ETF 3.30%
- Weighted yield (per year) 7.34%
The income characteristics are a defining feature here. The blended dividend yield is about 7.34%, driven by the very high yield of the Nasdaq 100 income ETF at 13.4%, alongside a more traditional 3.3% from the Schwab dividend fund. Dividend yield is the annual cash payout as a percentage of the investment value, and a 7%+ level is notably higher than the broader US market. This means a meaningful part of total return can come from cash distributions rather than just price changes. High yields can be attractive, but they can also reflect the use of options strategies or exposure to stocks that may not grow as fast, so total return patterns can differ from the overall market.
Ongoing product costs
- NEOS Nasdaq 100 High Income ETF 0.68%
- Schwab U.S. Dividend Equity ETF 0.06%
- Weighted costs total (per year) 0.31%
On costs, the weighted total expense ratio (TER) is about 0.31% per year, combining a very low‑cost core dividend ETF at 0.06% and a higher‑fee income ETF at 0.68%. TER is the annual fee charged by the funds, expressed as a percentage of assets — like a small yearly haircut on performance before it reaches the investor. A blended 0.31% is moderate: not ultra‑cheap like plain index trackers, but reasonable given the option‑based high‑income strategy inside one holding. Over long periods, even fractions of a percent compound, so keeping the core at very low cost meaningfully helps balance the overall fee load of the portfolio.
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